Reconciliation Australia has stripped Telstra of its Reconciliation Action Plan after revelations that Telstra knowingly ripped off over 100 Indigenous customers in remote locations where Telstra was the only mobile provider.

From January 2016 to August 2018, five Telstra-licensed stores across the Northern Territory, Western Australia and South Australia signed up 108 Indigenous customers to multiple post-paid mobile contracts.

Customers were living on government benefits and spoke English only as a second or third language — they could neither afford nor understand the exorbitantly priced contracts they had been signed up to.

Telstra then allowed the debts owed by some customers to be sold to third-party debt collectors.

Consumer watchdog, the Australian Competition and Consumer Commission (ACCC), alleged the actions breached Australian Consumer Law and initiated court proceedings against Telstra, who appeared in court on Wednesday regarding the matter.

Telstra previously agreed to pay a $50 million fine for the phone plan rort. The Federal Court is now deciding whether this is an appropriate amount.

Undertaking their own investigation in November 2020, shortly after the allegations of sales malpractice had come to light, Reconciliation Australia concluded this week the telco giant “has not met its own aspirations to be a leader in the Reconciliation movement nor the expectations of an Elevate RAP partner”.

Elevate is the highest of four rankings in the RAP system. Those with Elevate status are for organisations with a “proven track record” on RAP implementation and who “actively champion initiatives to empower Aboriginal and Torres Strait Islander peoples”.

Reconciliation Australia said in a statement the ACCC’s findings were “deeply troubling” and called Telstra’s business practices during the period in question “unconscionable”.

“Reconciliation Australia expressed to Telstra extreme concern about both the impact of the individual business practices on vulnerable Indigenous consumers and the failure to respond quickly to address the problem.”

Reconciliation Australia undertook similar action against Rio Tinto after the miner wilfully destroyed 46,000-year-old caves sacred to the Puutu Kunti Kurrama Pinikura peoples in May 2020. Also with an Elevate RAP at the time, Reconciliation Australia stripped Rio Tinto of their Elevate status and suspended them from the RAP program entirely.

In a video statement on Tuesday, Telstra CEO Andrew Penn addressed Reconciliation Australia’s decision to revoke their RAP, conceding that the telco’s conduct during this time was “unconscionable”.

“I am deeply and personally disappointed that we have let Indigenous Australians down. It’s just not okay,” Penn said.

“We should have been more attuned, we should have listened harder to what was happening, because we could’ve picked this up earlier.”

Telstra has since agreed to implement a First Nations Connect hotline and a separate complaints handling system for Indigenous customers.

By Hannah Cross